Market prices and yields aggregate information that policymakers lack, and artificially suppressing yields prevents critical information from reaching decision makers.
Too little corroboration in the last 3 days to call a trend (2 articles). Watching for it to gain traction.
Market prices and yields contain aggregated information that policymakers lack, and artificially suppressing yields prevents critical information from reaching decision makers, undermining the price discovery process and creating policy errors based on distorted market signals.
When yields are artificially suppressed below market-clearing levels, the information content of prices deteriorates, which causes policymakers to misread true economic conditions and make decisions based on false signals, leading to policy mistakes that ultimately require larger corrections and create volatility.
"Markets aggregate information no committee possesses, and prices are how that information reaches decision makers."
"part of the recent rise in yields has been tied to this lack of credibility around policymaking at the Fed, and in particular, a lack of transparency from the Fed chair"